In a significant development, the U.S. International Development Finance Corporation (DFC) has announced a $553 million loan to Colombo West International Terminal Private Limited (CWIT), a project partially owned by the Adani Group. The funding aims to support the construction and operation of the West Container Terminal at the Port of Colombo, enhancing Sri Lanka’s role as a global logistics hub and boosting export capabilities in the Indo-Pacific region.
The loan marks the first instance of the U.S. government, through one of its agencies, funding an Adani project. DFC CEO Scott Nathan, accompanied by U.S. Ambassador to Sri Lanka Julie Chung and Sri Lankan Foreign Minister Ali Sabry, ceremonially launched the new terminal, emphasizing the commitment to high-quality infrastructure.
The Port of Colombo, the largest trans-shipment port in the Indian Ocean, has been operating at over 90% capacity since 2021, necessitating additional capacity. The West Container Terminal is part of the Colombo Port Expansion Project, aiming to meet the growing demand for shipping.
(Image Credit-Express) The $700 million West Container Terminal project, considered the largest foreign investment in Sri Lanka’s ports sector, is a compromise following the cancellation of the 2019 East Container Terminal agreement. Adani Ports, with a 51% stake, leads the consortium developing the terminal on a Build, Operate and Transfer (BOT) basis for 35 years.
The DFC funding reflects efforts by the U.S. and India to counter China’s influence in Sri Lanka, a key transit hub. Sri Lanka’s default on foreign debts last year opened opportunities for other major players to establish economic ties and reduce China’s influence.
DFC’s $553 million commitment is seen as a counterbalance to China’s extensive investments in Sri Lanka’s infrastructure. Sri Lanka’s strategic location on major shipping routes makes it a focal point for global powers seeking to assert influence in the region.
For Adani Group, the U.S. investment is viewed as an endorsement, providing support after a damaging report earlier in the year. The financial backing is expected to contribute to the Adani Group’s efforts to recover from challenges and reaffirms international confidence in its vision, capabilities, and governance.
The move underscores a geopolitical shift in the region, with countries strategically aligning to counterbalance China’s increasing influence. The world will closely monitor China’s response to this development in Asian waters.